GameStop, the American video game, consumer electronics, and gaming merchandise retailer, has experienced a significant drop in its share price, plummeting as much as 30% from its recent highs. The once-thriving meme stock frenzy appears to be losing steam, with GameStop's stock closing at $27.67 after Thursday's trading session.

GameStop's Bullish Resurgence and Reversal

Earlier this week, GameStop reignited its bullish momentum with the re-emergence of Keith Gill, known as The Roaring Kitty on X. Gill was a key figure behind the short squeeze of 2021 that propelled GameStop's stock to dizzying heights. However, his absence from the market in recent times had dampened the enthusiasm surrounding the stock.

Gill's return served as a rallying cry for retail investors to pick up where they left off in 2021. The rally extended to other heavily shorted stocks, such as AMC Entertainment. GameStop's stock price soared as high as $64.83, marking an 18-month high, before succumbing to the recent downturn.

Despite the latest slump, GameStop's stock has retained over 53% of its gains over the past 5 days. However, market experts have cautioned against over-exposure to GameStop due to its speculative nature. Vanguard Chief Investment Officer Gregory Davis warned that the hype surrounding GameStop may not last, as the company's fundamentals and financials remain unchanged.

Broader Market Sentiment and Risk Asset Shift

The bearish reversal in GameStop's share price mirrors the general trend in the volatile asset sector. Cryptocurrencies, including Bitcoin and Ethereum, as well as crypto-focused stocks like Coinbase, have also experienced significant declines in recent hours.

This slump occurred despite the major victory scored at the United States Senate in repealing the SEC's SAB 121 accounting rule, which aimed to prevent banks from holding Bitcoin. However, investors have shown a lack of enthusiasm for this win, likely due to the uncertainty surrounding President Biden's potential veto.

The bearish sentiment has also extended to other major risk assets like GameStop, with the stock experiencing an additional 2.89% drop in after-hours trading. This shift away from risk assets suggests a broader market sentiment that is becoming increasingly cautious and risk-averse.